China tightens tax regulation on entertainment sector

China will further intensify tax regulation on individuals and businesses in the entertainment industry as part of efforts to promote the sector's sound and long-term development, according to the latest guideline released by the State Taxation Administration (STA).

The tightened regulation will focus on day-to-day management and require celebrities and livestreaming performers to set up tax accounts for their studios or businesses in accordance with the law and have their tax declaration and payment audited and verified by the tax authorities, said the STA circular.

The guideline also underlined the need to make regular tax risk assessments on this sector, based on which celebrities and network anchors exposed to tax risks will receive one-to-one prompts and rectify their problems.

During supervision, randomly selected law enforcement inspectors will conduct regular tax audits over randomly selected celebrities and network anchors.

Tax authorities at the grassroots level will also face stricter supervision. For instance, tax officers who take advantage of their power to practice favoritism and commit fraud will be seriously punished according to the law.

Tax authorities at all levels are banned from pulling their punches by illegally setting up tax incentives or applying tax incentives in flexible ways. A relevant overhaul will be conducted to prevent the abuse of tax incentives and at the same time ensure that relevant firms and individuals can fully enjoy legal tax incentives.

The administration also required tax departments at lower levels to respond to and address the needs and legal requests of the entertainment sector for tax payment services in a timely manner.